Deputy Prime Minister Teo Chee Hean at the Global Compact Network Singapore Summit 2018

Deputy Prime Minister Teo Chee Hean at the Global Compact Network Singapore Summit 2018 on 19 November 2018 at Suntec City Convention Centre.

“Working together for a Low-Carbon and Green Future”

Ms Goh Swee Chen, President of the Global Compact Network Singapore and Chairperson of Shell Companies in Singapore,
Ms Lise Kingo, CEO of the United Nations Global Compact,
Distinguished Guests
Ladies and Gentlemen,

A warm welcome to the conference this morning, and for those who have travelled to Singapore, a warm welcome to Singapore.

I am happy to join everyone at the tenth edition of the GCNS Summit. This is an important milestone, and marks the continuous efforts of GCNS in promoting corporate sustainability and collaboration among businesses, government and civil society.

Importance of Sustainability

The theme for this year’s Summit is “Building Better Businesses”. More businesses now recognise the importance of sustainability in their long term corporate strategy. The Summit provides an opportunity for companies to discuss what you can do to support the Sustainable Development Goals, address climate change, and unlock new growth opportunities.

Climate change is one of the greatest global challenges of our time. You may find it a little strange that I am the Coordinating Minister for National Security but I am here talking about climate change. But it is not so strange for us in Singapore. I chair the Inter-Ministerial Committee on Climate Change to make sure that all aspects of it are brought together, whether it is economics or human development; whether it is mitigation, adaptation, or the economic costs and benefits of each of these measures and the impact that they have on life in Singapore, including the social aspects. For example, just a couple of weeks ago, we had a fairly major meeting to look at what adaptation measures we need to take in the event of the various UN climate change scenarios eventuating – various sea level rises – so that we are able to deal with them. What do we need to do for coastal protection? What do we need to do in terms of the elevation of land levels and so on, over the next 70, 80 years, up to 2100? When do we need to start implementing each of these measures? In a sense, it is a national security issue for us because we are a very low-lying country and island nation, with not a lot of land. So if the sea levels do rise, we become significantly smaller and it becomes a matter of real survival for us.

Climate change requires a global solution, where governments, private sector, civil society and private citizens work in unison. The world is already experiencing the effects of climate change in the form of rising temperature and more frequent and intense weather events, and they are disrupting our daily lives. Businesses also will be affected and disrupted, not just by the primary effects of climate change, but also by the second and third order effects, disrupting their operating models and supply chains. What you considered to be a profitable way of doing business may no longer be true in the future, and in a not too distant future.

The recent special report by the Intergovernmental Panel on Climate Change projects that, based on current global efforts, the world will face a 3°C temperature rise by the end of the century. If we are to meet the Paris goal of limiting this to 1.5°C, global emissions need to peak, come down, and then reach net zero around 2050. Countries therefore have to significantly step up their collective climate action.

Several countries have peaked their emissions and many others, like Singapore, have committed to peak their emissions and are developing long-term low-carbon emission pathways beyond 2030.

Singapore doing our part

As a small, low-lying island nation, we have to take this very seriously because we are particularly exposed to the effects of climate change. Singapore is fully committed to global efforts to address climate change. Even though our geography limits our alternative energy options, we have made an ambitious pledge to reduce our emissions intensity by 36 per cent below 2005 levels by 2030, and stabilise emissions with the aim of peaking around 2030.

Singapore is already among the 20 most carbon-efficient countries in the world. We will continue to improve our carbon efficiency through a range of measures: further encouraging the use of public transport – we are going to go to about 70 per cent model share, building the next generation of super low-energy green buildings, and using natural gas rather than more carbon-intensive fossil fuels for power generation. We have also taken actions to cost-effectively harness as much renewable energy as we can, given our geographical constraints. We operate waste-to-energy plants that generate an average of 440 kilowatt-hour per tonne of waste incinerated, providing 1.2 terawatt-hour of power annually. In national terms, that is about 2 to 3 per cent of Singapore’s electricity consumption from waste-to-energy plants. We are on track to deploy 350 megawatt-peak of solar capacity by 2020, and we intend to raise it to 1 gigawatt-peak beyond 2020 using innovative ideas like solar panels floating on reservoirs and at sea.

Role of businesses

We need the private sector to be partners in our sustainability efforts. I have three suggestions on how our companies can contribute and, in fact, can benefit – Cut Carbon, Exchange Experiences, and Go Green.

First, Cut Carbon. The manufacturing sector alone in Singapore contributes about 60 per cent of our greenhouse gas emissions. These are significant emissions, and there are many significant reduction opportunities as well, especially in energy-intensive facilities, which can help meet our emission targets in an efficient way.

Collectively, our companies have reported an energy efficiency improvement rate of 0.8 per cent in 2016. That is an improvement from where we were previously in – 2014, when we were at 0.4 per cent. That is actually very modest. We should continue to strive for energy efficiency improvement rates of closer to 1 per cent to 2 per cent that are achieved by leading countries like the Netherlands and Belgium.

To encourage efficient energy use, Singapore prices energy at market rates, including renewables, so that consumers and businesses take into account the real cost of using these resources and avoid excessive consumption or wastage. Come 2019, our businesses and consumers will also begin to internalise the cost of carbon, with the introduction of our carbon tax. It will be set initially at a modest level of S$5, but there are no exemptions, so it applies evenly across the whole economy.

The carbon tax revenue will be used to provide grants and incentives to help businesses become more carbon efficient. As announced at the Singapore International Energy Week last month, industry energy efficiency grants will be enhanced to motivate businesses to further improve their energy efficiency. I encourage all of your businesses to tap on these grants to implement initiatives to reduce your energy costs and emissions, and to grow sustainably.

To remain competitive in the long term, businesses need to incorporate climate risks and decarbonisation into their strategies. According to the World Bank, over 1,300 forward-looking companies have already implemented internal carbon pricing to guide their investments and address climate risks, or plan to do so by 2019. So that gives you an opportunity to see how viable your businesses, your cost structures, and your operating models are if you assume that a certain cost of carbon emissions have to be internalised in your company. That may have to be done and may occur in the coming years.

Second, Exchange Experiences. Addressing climate change is a continuous journey, and we need to exchange experiences and best practices to help one another do better.

GCNS has played a very important role in galvanising the corporate sector to make sustainability a core part of their business strategies. I am glad that GCNS is working with the World Bank’s Carbon Pricing Leadership Coalition to launch the Singapore chapter. This will be their first official chapter. I encourage more companies to join and make use of this platform to share experiences and best practices for sustainability. If you know that others are going along, you know that there is a path that can be taken. If you know that others are going along, and you do not go along, then you are going to get left behind. So I think there are two good reasons why you should join and go along with what others are doing.

By working together and exchanging experiences, Singapore now has a thriving cluster of 180 water companies. Why do I talk about water companies? It is indeed one of our Sustainable Development Goals but water and energy also have a very strong nexus with each other. If you take water from a distant water source, you have to put in a lot of energy just to pump the water to get it to you. If you use water from a modern source of desalination or membrane technology to clean waste water into potable water, it is again an energy equation. At some point in time, pushing water through a membrane takes about as much energy as pushing water through a pipe over a very long distance. The costs are beginning to equalise. Water is also a very important sustainability issue for Singapore. We now have more than 20 water-related research centres here in Singapore, including two of the world’s best universities for water research. They are able to offer a range of solutions for various needs internationally. This came about because of a quest for water security, which is one example where necessity has forced us to do better.

Third, Going Green, or Going for Green Growth. There must be a good economic case for businesses to go green. Climate change is not only about challenges and constraints. It also provides strong incentives for entrepreneurship, research and development, and creative problem-solving to better prepare for and adapt to the impact of climate change. In Singapore, we are trying to position ourselves well to become a green growth hub and take advantage of new green growth opportunities.

Sustainability is one of the strategic priorities of our Research, Innovation and Enterprise 2020 plan, which is our sixth, five-year roadmap for R&D. I was chairing the National Research Foundation until just a couple of months ago. Under the plan, we have S$900 million earmarked over a five-year period from 2016 to 2020 to develop urban sustainability solutions. Through collaboration with industry partners, new knowledge and solutions created in water, energy, land management and food resilience can offer new business and economic opportunities.

Singapore has developed a suite of supporting services and opportunities to serve as a “living laboratory” for companies and researchers to develop, test and validate clean-energy technologies in real-world settings. One example is the CleanTech Park developed by JTC Corporation, which is the first eco-business park in this region. It provides a platform for clean technology companies to come together. The Park encourages cross-fertilisation of ideas and allows companies to prototype sustainable urban solutions. This is a 50-hectare Park developed in three phases and the intent is to create 20,000 green collar jobs when completed by 2030.

Another example is the Renewable Energy Integration Demonstrator in Singapore, or REIDS, operated by the Energy Research Institute @ NTU. It is located in the Semakau Landfill, and this is the largest hybrid microgrid platform in the tropics. If you have not visited Semakau Landfill, I suggest that you do. It is a very pleasant place to visit and you will enjoy yourself quite a lot. This microgrid is in the Semakau Landfill, and companies, together with REIDS, can test the integration of renewable energy from solar, wind, tidal, biofuel and fuel cells with smart grid technologies in tropical conditions, because there are specific issues for operating in tropical conditions. This project will pave the way for the research and development of sustainable microgrids to address the growing demand for better and more affordable energy access, especially in the many islands and remote areas in Southeast Asia, where there are very good business opportunities as well.

By tapping on opportunities for green growth, our companies can turn Singapore into a green growth hub to provide world-beating innovative and sustainable solutions. In fact, in many ways, this is the story of Singapore. We have turned constraints into opportunities, and limitations into success. And this is what we intend to do with climate change and sustainable growth.

Sustainability stewardship is a shared responsibility, which our future depends on. I am happy to see so many business leaders here today, committed to our collective journey towards a green and sustainable future. To recognise the next generation of corporate sustainability leaders, we will also be presenting the CDL-GCNS Young SDG Leaders Award later this morning.

I look forward to hearing your views and having a discussion so that we can work together for a low-carbon and green future.

Thank you very much.

Source: Prime Minister's Office